Amid Boom Times for Spain, Aznar in a Fierce Struggle for Reelection

He still looks the part of a provincial tax inspector, the job he held before rising, improbably, to govern Spain. His heavy eyebrows and mustache seem to suppress any instinct to smile, even for the voters he needs again today.

Yet as he wound up his reelection campaign, Prime Minister Jose Maria Aznar projected the image of a leader who has grown in stature and confidence to become, thanks to Spain’s booming economy, the standard-bearer for Europe’s few ruling conservatives.

“Let us not go back; let us not look back,” Aznar declared late Friday, energized by the jubilant crowd that packed an indoor stadium here for his Popular Party’s closing rally. “Let us design new objectives for a more ambitious Spain--a Spain that is capable of being the best of Europe.”

The 47-year-old incumbent should be a shoo-in in today’s balloting. Since he took office in 1996, Spain’s economy has created 1.8 million jobs and has grown faster than any other in Europe except Ireland’s. He has managed to lower personal income taxes while slashing the budget deficit enough to lead this country of 40 million people into Europe’s single-currency union.

In narrowing the income gap with Spain’s richer neighbors, he also has abandoned his party’s extremist roots in the 36-year dictatorship of Gen. Francisco Franco, who kept the country backward and isolated until his death in 1975.

All that, however, may not be enough.

At the end of a campaign marred by a resumption of Basque separatist terrorism, opinion polls showed Aznar’s forces holding a 4- to 5-percentage-point lead over the Socialist Party but falling short of a majority in the 350-seat lower house of Parliament.

To be sure of retaining power, Aznar’s party must finish first in today’s voting and reach a combined majority with nationalist parties in Catalonia and the Canary Islands, which so far have supported his minority government.

Otherwise, a coalition of Socialists and Communists patterned after the one that governs France could get a chance to try forming a government with smaller allies.

That Aznar’s chances are uncertain has less to do with his dour demeanor, pollsters say, than with deep polarization about Spain’s Francoist past.

The country’s heart, its people like to say, beats to the left of center. Voters kept the Socialists in power from 1982 to 1996 under Prime Minister Felipe Gonzalez. They still credit him with bringing Spain into the North Atlantic Treaty Organization and the European Union and with launching free-market reforms that spurred years of spectacular growth.

They dumped the immensely charismatic Gonzalez, by the narrowest of margins, only after corruption scandals and a deep recession discredited his regime.

At the time, Aznar was portrayed by his foes as a neo-Francoist who would reimpose strong central authority over Spain’s autonomous regions, slash pensions, kill off failing state companies at a merciless rate and provoke conflict with labor unions. None of that has happened.

Instead, he has governed carefully, often seeking consensus with regional and union leaders. He has avoided major strikes while moving ahead with privatization and more flexible labor laws, which have helped reduce unemployment from 22% at the start of his term to 15%. By getting Spain into the euro zone--when he took office, it met none of the requirements to join the currency union--he has presided over falling interest rates and burgeoning investment.

But the Socialists, trying to win back their traditional voters, ran a vigorous campaign against the concentration of Spain’s new wealth and the insecurity of the newly employed.

Most new hiring in Aznar’s Spain is on temporary contract. And with more women working and fewer able to take paid maternity leave, Spain has one of the world’s lowest birthrates, an average of 1.07 children per woman.

“Employers have a lot more freedom to abuse their employees or fire them,” said Rosa Rubio, 43, a production assistant at a state-owned TV station that may soon go private. “To many workers, the bonanza isn’t real. It’s a society of sink or swim.”

Rubio conceded, however, that “people may not be fed up enough” to embrace the opposition, which is divided internally over privatization and the goal of a 35-hour workweek. The alliance is headed by Joaquin Almunia, 51, an affable former Socialist labor minister whose leadership skills are untested.

“Spaniards have suffered an excess of charisma in their leaders. Now they want a good manager,” said Raimundo Castro, the Socialist-leaning author of an Aznar biography. “Aznar may be boring, but he’s been a good manager. He’s turned a liability into an asset.”

Another of Aznar’s assets is his extroverted wife, Ana Botella, who has drawn crowds of women to campaign rallies.

Aznar is a cautious victor in his party’s post-Franco leadership struggles. He is quoted in Castro’s book as saying, “I survived because they underestimated me.” He became party chief in 1990 and escaped with a slight facial cut five years later after a Basque terrorist car bombing that boosted his appeal as a hard-liner against separatism.

But the assassination attempt also displayed Aznar’s remoteness. A 75-year-old bystander died in the blast, but the conservative leader never contacted her family, according to Paulino Baena, a spokesman for the Terrorist Victims Assn.

“Aznar is a bit cold,” Baena said.

Although he is a devout Roman Catholic who has three children in Catholic schools, Aznar has had no qualms about sidelining party loyalists identified with the Francoist religious right or rejecting appeals by Spanish bishops that religious teaching be restored in public schools.

He has also ignored Thatcherite economic liberals in his party and relabeled it the “reforming center.” He makes much of his affinity with British Prime Minister Tony Blair, who has pushed his Labor Party from the opposite end of the spectrum. The two men get along, as do their wives.

As Spain starts to draw large-scale immigration from North Africa, Aznar has condemned the growing racist reaction, saying that all those who work here are “contributing to the prosperity of Spain.” He backed a European Union demand that Joerg Haider’s extremist Freedom Party be excluded from power in Austria, one of just two other EU members with a conservative government.

“Radicalization is an error, the strategy of losers,” he told the newspaper El Mundo last month.

Aznar has had more trouble distancing himself from Spain’s tradition of crony capitalism. He was embarrassed during the just-ended campaign when Juan Villalonga, a boyhood schoolmate and now godfather to his younger son, suddenly became one of the richest men in Spain by cashing in $17 million in matured stock options in Spanish telecommunications giant Telefonica.

The prime minister, who had named Villalonga head of the company before it went private, pleaded with his friend to renounce the profits on his options, to no avail. While nothing about the deal appears illegal, Almunia pounced on it as a case of “Robin Hood in reverse,” charging that Aznar “has put a lot of power and money in just a few hands.”

Aznar’s biggest shortcoming, though, has been his failure to pacify the Basque region of northern Spain. The moderate Basque nationalists who govern the region recently withdrew their support from his government, accusing it of being too inflexible during the ETA guerrilla group’s 14-month unilateral truce, which ended in December.

Since then, ETA--the initials stand for Basque Homeland and Freedom--has resumed its 32-year-old independence struggle by setting off four car bombs, which killed an army colonel in Madrid and a Socialist leader and his bodyguard near the Basque regional Parliament building.

More recently, ETA’s political wing has withdrawn from parliamentary races and urged voters to stay home today. And about 134,000 police and civil guards have been mobilized across Spain to protect polling places.